Option Traders Bet on Financial Stocks Taking a Fall

Feb 23, 2012 4:39 pm ET

By Kaitlyn Kiernan

Bloomberg News

If options traders are to be believed, the U.S.’s biggest banks still have a tough road ahead.

A spike in bearish options activity on Goldman Sachs and the Financial Select Sector SPDR, an exchange-traded fund that includes shares of Wells Fargo, J.P. Morgan , Berkshire Hathaway, and Citigroup suggests the banks’ shares may have a tough spring ahead after a spectacular start to the year.

Even after a lackluster fourth-quarter earnings season showed lending and trading profits remain low, the country’s banks–among last year’s hardest-hit shares–have rebounded as a whole at a quicker rate than the S&P 500.

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